I cut the flowers, butterflies etc from a pair of curtains I had bought for £1 at a car boot sale and I used off-cuts from other projects to trim the squares. I backed the quilt with a section of the curtain.
I had previously used polyester wadding for similar items but found it very annoying to sew as it was bulky plus it would get caught up in the sewing machine needle. So I ordered some cotton batting and used this instead and it made life so much easier. The batting I bought has a 5% shrinkage on washing first time. You can pre-shrink it if you want or do as I did, which was sew my quilt up then wash it, if you do it this way you get that lovely wrinkled look that you see on old quilts.